Cross-border issues that arise in conjunction with the execution of U.S.-Canadian natural gas contracts

Development of the U.S.-Canadian natural gas market as it is today and the issues that may arise in cross-border transactions involving natural gas contracts between the two countries are reviewed. In this context, the paper reviews recent history of U.S.-Canadian trade relations culminating in the development of NAFTA, the U.S. regulatory and legislative framework surrounding cross-border natural gas transactions, and general U.S. foreign trade policy that may come into play at the U.S.- Canada border. The paper also examines certain issues arising in the U.S. commercial context that may be of interest to Canadian corporations, specifically the U.S. Uniform Commercial Code, state jurisdiction on the U.S. side of the border, state and federal tax concerns, and the mechanics and potential benefits for a Canadian parent company in forming a U.S.-based subsidiary to handle U.S.-Canada natural gas transactions. 71 refs